Mitigating Fiduciary Risk

In-house counsel bear the critical responsibility of safeguarding their organizations from fiduciary liabilities associated with employee benefit plans. Negotiating Third-Party Administrator (TPA) agreements is a strategic measure to ensure compliance with the Employee Retirement Income Security Act (ERISA) and other pertinent regulations. By meticulously reviewing and updating contract terms, organizations can align their benefit plans with current legal standards, thereby minimizing exposure to fiduciary breaches. The Consolidated Appropriations Act (CAA) and the No Surprises Act (NSA) introduce additional compliance requirements, making it imperative to address these elements during TPA negotiations. Our services are designed to assist in-house counsel in identifying and rectifying potential fiduciary risks within existing TPA agreements, ensuring that all contractual obligations are met and that the organization is protected from legal repercussions.

Ensuring Regulatory Compliance

The healthcare regulatory landscape is continually evolving, with new laws and regulations impacting benefit plan administration. The CAA and the NSA, for instance, have introduced significant changes aimed at enhancing transparency and protecting consumers from unexpected medical bills. In-house counsel must ensure that TPA agreements are updated to reflect these regulatory changes, thereby maintaining compliance and avoiding potential penalties. Our expertise lies in analyzing current TPA contracts to identify areas that require modification in light of new regulations. We provide guidance on incorporating necessary provisions that address these changes, ensuring that your organization remains compliant and that your benefit plans operate within the legal framework.

Clarifying Roles and Responsibilities

Ambiguities in TPA agreements regarding the roles and responsibilities of each party can lead to operational inefficiencies and legal disputes. Clearly defined obligations are essential to ensure smooth plan administration and to prevent misunderstandings that could result in fiduciary breaches. The NSA, for example, imposes specific requirements on TPAs concerning transparency and billing practices. Our services focus on revising TPA agreements to delineate the duties of all parties explicitly, incorporating provisions that address these new obligations. By establishing clear expectations, we help in-house counsel mitigate risks associated with misinterpretation and non-compliance, fostering a more effective partnership between the organization and the TPA.

Establishing Audit Rights

The ability to audit TPA performance is crucial for monitoring compliance, service quality, and financial accuracy. In-house counsel must ensure that TPA agreements include robust audit provisions that grant the organization the right to review the TPA’s operations and adherence to contractual terms. The CAA emphasizes the importance of transparency in healthcare transactions, making audit rights even more pertinent. Our approach involves incorporating comprehensive audit clauses into TPA contracts, specifying the scope, frequency, and procedures for audits. This empowers your organization to conduct thorough evaluations of the TPA’s performance, ensuring that services are delivered as agreed and that any issues are promptly identified and addressed.

Limiting Indemnification Obligations

Indemnification clauses in TPA agreements determine the extent to which each party is responsible for liabilities arising from their actions. In-house counsel must negotiate terms that prevent the organization from bearing undue liability for the TPA’s conduct. With the introduction of the No Surprises Act, TPAs have additional responsibilities, and any failure on their part could expose your organization to legal risks. Our services include a thorough review of indemnification provisions to ensure that they are balanced and that your organization’s interests are protected. We work to limit your indemnification obligations, ensuring that the TPA is held accountable for its actions, thereby reducing your organization’s exposure to potential claims and financial losses.

By addressing these critical areas, our services assist in-house counsel in renegotiating TPA agreements that align with current regulations, clarify operational responsibilities, and protect the organization from unnecessary risks. We provide the expertise needed to navigate the complexities of TPA contracts, ensuring that your organization’s benefit plans are managed effectively and in compliance with all legal requirements.